المساهمون

الأحد، 26 يوليو 2015

Where Are Holidays Cheapest As Pound Soars?

British tourists finally have something to be grateful for after delays in Kent and strike action in France as the soaring pound has pushed down the price of holidaying in the eurozone.

Holidays to the 19 eurozone countries are now nearly 12% cheaper than they were at this time last year, after the value of the euro plummeted.

Given that the average Briton takes around £450 of spending money on holiday, this equates to a currency cost saving of over £50 for those heading to Spain, France or Italy this summer.

The euro fell below 70p for the first time in eight years on 16 July, making travelling to Europe cheaper than at any other time over the last eight years.

For holidaymakers heading to Turkey the gain is even greater, with holidays costing 20% less than they did in August last year.

The Turkish lira fell victim to the political uncertainty associated with its domestic elections this year together with concerns surrounding its neighbour, Syria.

And for those really looking for a bargain there is no better place to go than the Ukraine where the currency, the Hryvnia, has weakened nearly 75% against sterling following sanctions imposed by Russia.

For tourists heading to Orlando or Geneva this summer, however, the news is less positive. A strengthening US dollar and Swiss franc means holidays to these areas will cost 7% and 1% more respectively, from a currency perspective that is.

The Swiss franc has had a tumultuous year following the central bank's decision in January to scrap a three-year-old cap on the franc. The cap had meant that the Swiss franc could not strengthen beyond the 1.20 level against the euro, but when this was dropped it surged to parity against the euro.

And the strong pound is not good news for everyone.

A report by the British Chamber of Commerce (BCC) this morning showed that the UK is set to miss the Government’s target of hitting £1tn worth of exports by 2020 by 14 years.

The UK is the number two exporter of services in the world, behind only the US, but both regulatory and language barriers are curtailing further growth according the the BCC.

The BCC's survey also highlighted service export hot spots for the next five years. In addition to the usual destinations of Germany, France and the US, the BCC believe China and the United Arab Emirates will become key customers for the UK's professional services.

Finally, the relative strength of the pound may dampen the Bank of England's enthusiasm for an early interest rate rise. Any rise would send the pound further north so it would be in Mark Carney's interest to carefully consider the export implications of such a rise.